Fintech startup, Mobikwik, is on the lookout to raise money from the private market, after filing a DHRP raise of about $250 million through an initial public offering.

The startup has witnessed a revenue growth of 86 percent Y-o-Y for the nine months ending December 2021 with Rs.397 crore. Consolidated gross merchandise increased to 152 percent at Rs 25,780 crore.

This growth received its boost from the increasing BNPL (buy now pay later service) with disbursals growing at 840 percent to Rs 1,858 crore during the period. Currently, the BNPL segment contributes about 20 percent to the company’s revenue stream, added with a share increase expectation over the next few quarters.

“We will raise private money but we are not in dire need. The business was profitable for the first time in the December quarter on a topline of around Rs 150 crore and that will be maintained in the March quarter also. We are generating cash”, says Upasana Taku, co-founder of Mobikwik.

Taku states that the company’s unit economics has vastly improved over the past two years, which nudged the company to invest about $50 million to grow its revenue by 2.5X over FY19. In FY22, the company is looking forward to record revenue growth of Rs 550-600 crore, which sums up to 100 percent for the previous fiscal.

“Even if any of our competitors raise a billion dollars of funding today, they will not have a user base of 25 million eligible BNPL users any time soon. Some of the new companies have two million or three million users,” says Taku.

Taku adds that the BNPL segment’s loan defaults have already gone back to their pre-COVID form.

The company reveals that “this strategy of focusing on sustainable growth has helped the company invest aggressively at the right places i.e., on people and technology without incurring high cash burn and sacrificing growth”.

The fintech company reported losses of Rs 111.3 crore in FY21, Rs 99 crore in FY20, and Rs 147.9 crore in FY19, according to its DRHP.

Previously, the fintech startup had postponed its planned public listing in November of last year after Paytm's shaky launch on the stock exchanges. On October 7, it gained Sebi approval for its listing.

Mobikwik raised roughly $20 million from Abu Dhabi Investment Authority (ADIA) in June of this year, valuing the company at around $750 million.

“I think that it is common sense that if the markets are acting erratically then why do you want to risk the outcome of something for which you worked so hard? We have been working very hard for the last 12 years to get to this stage. I cannot think of any internet company which has reached over 10 crore users, having spent only Rs 700 crore. We have reached this stage after hard work so the IPO should be a bumper. We will fight for this only”, says Taku.